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The president of the World Bank Group Jim Yong Kim is of the view that distributed ledger technology has huge potential and urged banks and other financial institutions to keep up by adopting the technology.

Distributed ledger technology to help deliver practices

Kim is of the view that the distributed ledger technology has huge potentials and is vital to the World Bank’s goals. He made this statement during the International Monetary Fund (IMF) and the World Banks’ Annual Meetings in Bali.

He stated that the mission of the World Bank is to end poverty and boost prosperity and that distributed ledger technology has a huge role to play in achieving that.

The technology could help the World Bank rapidly fight decades of corruption and inefficiencies. He explained that;

We talked about cryptocurrencies but we think distributed ledger [technology] has huge potential and we issued the first blockchain bond in August, where we created, allocated, transferred and managed the entire bond through blockchain technology.

Kim explained further that leveraging distributed ledger tech eliminated most of the paperwork required to issue the first blockchain bonds and severely reduced the issuance costs.

In his words, the World Bank hasn’t been keeping up with the latest developments but they are looking to change that as they aim to provide ways that would help their clients take advantages of the great things that are coming out.

Risks still involved in the fintech space

Talking further about the goals of the World Bank, Kim stated that universal access to financial services by 2020 still remains one of their goals. He stated that there is a huge potential in the Fintech industry.

He added that things usually move fast in the fintech space, even though a few risks still exist in the industry.

Last year, the World Bank threw its weight behind blockchain despite several claims that it is used for Ponzi schemes. Kim, back then, stated that blockchain technology has tons of potential and was attracting the attention of many.

Kim praised Bitcoin, explaining that its network is one of the few instances where distributed ledger tech was used as a currency. He explained that most of the other networks were simply pyramid schemes.

It is therefore very important that if the bank continues studying and applying the tech that they must be certain it won’t be used wrongly.

Kim added that since the organization deals with countries that don’t have tech hubs like Silicon Valley, it is absolutely important that they keep up with these new technologies.

Back in August, the World Bank and the Commonwealth Bank of Australia (CBA) issued a public bond on a blockchain. The bonds worth $73 million were successfully issued on the Ethereum network without third parties.

Arunma Oteh, a treasurer at the World Bank while commenting on the success of the blockchain-platform stated that they would continue to find ways to take advantage of emerging technologies.

This would help them make the capital markets safer and more efficient, he added.